Belt and road reflects reality that China is now a world power, Spanish foreign minister says

Belt and road reflects reality that China is now a world power, Spanish foreign minister says

Beijing’s global trade and infrastructure scheme reflects the new reality that China is no longer a developing country but a world power, according to Spain’s foreign minister.

But Josep Borrell Fontelles said any projects under the “Belt and Road Initiative” should stick to key principles, including environmental sustainability and a level playing field for all parties.

“[The belt and road] is proof that China is no longer considering itself a net receiver and starts considering itself a contributor to the world, and this is something Spain welcomes,” Borrell, minister of foreign affairs, the European Union and cooperation told the South China Morning Post.

“This entitles new responsibilities and requires for competitive advantages to be abandoned, as they do not correspond with the new reality of China.”

Borrell, 72, a seasoned Spanish politician and former president of the European Parliament, will attend the Belt and Road Forum that begins in Beijing on Thursday.

He said that while it was too soon to assess the impact of the New Silk Road, the EU shared the US view that China was already a world power, and that European cooperation in the scheme would be based on the premise that certain principles were respected.

While Spain has taken a “constructive” approach to the initiative and is a founding member of the China-led Asian Infrastructure Investment Bank, he said Spanish officials attending the forum wanted to learn more about the “evolving” programme.

The sprawling trade and investment plan aims to connect China with Asia, Africa, Europe and beyond along traditional land and sea routes. When it was launched by President Xi Jinping in 2013, it was referred to as a “project”, but it then became an “initiative” as Beijing sought to dispel worries over its ambitions.

Nearly six years on, more than 100 countries and international organisations have signed on to the belt and road, but wariness and distrust is building in Europe amid what critics call China’s “debt trap diplomacy” and neocolonialism.

Spain has not officially joined the programme, but it has worked with China on some belt and road projects. For example, Chinese state-owned shipping company Cosco now holds a majority stake in Noatum Port Holdings, the Spanish firm operating ports in Valencia and Bilbao, while a direct freight train link has been launched between the Chinese city of Yiwu and Madrid.

Borrell noted that Cosco did not “control” any Spanish ports – rather, it was operating some container terminals as the main shareholder in three of 46 ports in Spain.

He also said the train link had yet to reach its full potential since it started transporting goods between China and Spain in 2014.

The China-Europe Railway Express is a flagship belt and road project, but it has been widely criticised because there is far less freight heading east along the line than westbound goods, underscoring the imbalance in trade relations.

China and Spain pledged to address what Madrid called a “chronic deficit with Beijing” during Xi’s visit to the Spanish capital in November. Spain had a trade deficit of €20.63 billion (US$23.21 billion) with China in 2018, a 6.3 per cent increase from the previous year, according to the Spanish embassy in Beijing.

“Spain considers [the belt and road] still has positive potential to show, as long as some principles that in the EU we consider essential are taken into account: financial, labour and environmental sustainability of the projects, comprehensiveness of connectivity, respectful of international law, level playing field for all the parties involved,” he said.

“These principles must be respected for [the belt and road] to be a net positive contribution to the world, so that no one can be confused into considering it an imposition to the most vulnerable countries.

“Spain, within the framework of the EU, wishes to accompany this process of improvement of [the belt and road] as a contribution to other countries, respecting their liberty and sovereignty. In any case, it is still premature to voice a definitive assessment of such a great initiative of global dimensions,” he said.

Engagement and cooperation were expected to be the main theme of EU-China relations for the next five years or longer, according to the Spanish foreign minister.

Playing down a policy paper from the European Commission in March that labelled China as a “systemic rival”, Borrell said people should not overreact to it.

He also said there was nothing new about China and the EU holding different views of what was best for their citizens.

“The novelty now is China promoting alternative governance models abroad or even at the multilateral level. Here is where the commission identifies a systemic rivalry; the debate is not between the EU and China any more, but worldwide,” he said.

Noting that the commission also identified many areas for cooperation between China and the EU, such as the fight against climate change, he said: “This is not a paper seeking to heighten tensions between China and the EU, but a document that objectively assesses the relation between both giants with all its pros and cons.

“The EU has always addressed China on the basis that good friends are able to talk frankly about their disagreements and reach compromises at the negotiation table,” he said.

Transcript of the interview with Josep Borrell Fontelles

The US has blasted the Belt and Road Initiative as China’s “debt diplomacy” while some countries have embraced the programme by endorsing it. What’s your take on the Belt and Road Initiative?

BORRELL: First, China “entered the world” by accessing the World Trade Organisation in 2001. The whole world was happy for it as the expectations for world trade increasing were high. Eighteen years later, China has entered the world, but the world has not entered in China to the same extent. [The Belt and Road Initiative] is the expression of a new phase in the relationship between China and the rest of the world: China is no longer a developing country, but a world power.

This entitles new responsibilities and requires for competitive advantages to be abandoned, as they do not correspond with the new reality of China. China is already in the world and [the Belt and Road Initiative] is somehow its introductory letter. It is China’s way to tell the world “this is what I am offering you”. [The Belt and Road Initiative] is proof that China is no longer considering itself a net receiver and starts considering itself a “contributor” to the world. And this is something Spain welcomes.

[The Belt and Road Initiative] is a five-year-old magnificent initiative. During this first five years of implementation in different parts of the world there have been positive and negative examples. China, a country which historically had chosen to be self-isolated from the world, is learning with [the Belt and Road Initiative] how to better relate with it. [The Belt and Road Initiative] was first launched as a “project”, it then became a reality as an “initiative”, and now I think it can be considered as well as a “process”.

In this moment of the [the Belt and Road Initiative] process, Spain considers this Chinese initiative still has positive potential to show, as long as some principles that in the EU we consider essential are taken into account: financial, labour and environmental sustainability of the projects, comprehensiveness of connectivity, respectful of international law, level playing field for all the parties involved … These principles must be respected for [the Belt and Road Initiative] to be a net positive contribution to the world, so that no one can be confused into considering it an imposition to the most vulnerable countries.

Spain, within the framework of the EU, wishes to accompany this process of improvement of [the Belt and Road Initiative] as a contribution to other countries, respecting their liberty and sovereignty. In any case, it is still premature to voice a definitive assessment of such a great initiative of global dimensions.

Many countries may be caught in the middle between wariness and hopes that the Belt and Road Initiative will bring development and opportunities. Why has Spain chosen to cooperate with China in some belt and road projects but still hasn’t endorsed the initiative?

BORRELL: One of the most visible characteristics of [the Belt and Road Initiative] is that it is evolutionary. Since it was launched it has mutated its nature (from a project to an initiative), its geographic scope (first focused in Eurasian connectivity; today presenting itself with global intentions), and its objective scope (first focused in ports, road, railways; today including energy and digital projects). [The Belt and Road Initiative] has mutated so much that it has even changed its own name (from “One Belt, One Road” to “Belt and Road Initiative”). It is an initiative still evolving, that we support, and we do so naturally within the framework of our own principles, the framework of our approach as an EU member state, as it is contained in the Euro-Asian Connectivity Strategy, presented last October at the ASEM Summit. This European strategy is based on a series of principles, such as fiscal, environmental, economic and social sustainability; comprehensiveness, including not only infrastructures; and level playing field.

How have the belt and road projects in Spain been faring, for example the ports controlled by Cosco and the China-Europe Railway Express? Are the results as Spain expected in terms of creating growth, jobs etc?

BORRELL: First of all, Cosco does not control Spanish ports. Spanish ports are national property. In our system we award licensed concessions with a time limitation and only referring to the operation of terminals. Our system permits for several different companies to be operators in the terminals of one same port. This allows for diversification so that it is unlikely that one single company operates all terminals of one port.

Moreover, the port structures are property of the Spanish state, and therefore it is impossible for one company, regardless of its nationality or origin, to control any Spanish port. Being a peninsula, we have 46 ports qualified as “ports of general interests”, and in only three ports out of 46 there is a Chinese company operating some container terminal as main shareholder.

On railway container transportation, Spain participates since 2014 in the transport of goods service of the China-Europe Railway Express, which from Yiwu reaches the Madrid-Abroñigal terminal. Up until now, the traffic (six trains per week approximately) has not reached its full potential. We have to keep working together to improve the results of this line: transit time must be reduced, volume of goods increased and more services offered. We support the Yiwu-Madrid rail line, an important element of [the Belt and Road Initiative], and to get it functioning properly it would also be necessary that Russia allow Spanish agricultural products to transit through its territory. China might help make it possible through its contacts with our Russian friends

In the EU-China Connectivity Platform of April 8, 2019, both the EU and China have agreed to develop a research study on railway corridors, and we are looking forward to seeing the results of this joint study. On the other hand, there is an interesting but very recent cooperation in the railway sector: in November 2018 Renfe/Adif have agreed with China Railway Corporation to exchange information on railway development and management, especially on high-speed trains.

What does Spain want to achieve by attending the Belt and Road Forum in Beijing this month?

BORRELL: Spain has always maintained a constructive approach to [the Belt and Road Initiative]. We were already present at the first Belt and Road Forum. Spain is also a founding member of the Asian Infrastructure Investment Bank. My attendance at the second forum, as personal representative of the prime minister, is proof we maintain this positive approach five years later. We are here because we want to learn more about [the Belt and Road Initiative] and of how we can expect it to evolve in the years to come. We want to learn about [the Belt and Road Initiative], first hand.

While Germany, France and some other countries in the EU have been increasingly on alert about China expanding its clout via the belt and road programme, some countries, especially in Central and Eastern Europe, are happy they have not been ignored. Do you think European countries will be split over the Belt and Road Initiative, or will they become more united in the face of China’s growing influence?

BORRELL: I wouldn’t describe the position of the EU and member states in these terms. In fact, all in the EU, we acknowledge the potential benefits of [the Belt and Road Initiative]. For instance, [the Belt and Road Initiative] provides necessary resources to promote development in developing regions and to build cross-country infrastructure contributing to global prosperity.

For this reason, at the end of 2018, the EU adopted its own Strategy for Europe – Asia Connectivity. The document identifies three guiding principles of international connectivity: sustainability, comprehensive and rules-based. The strategy’s aim is to create an EU engagement framework with [the Belt and Road Initiative] and other international connectivity initiatives. As a matter of fact, there is already an EU – China Connectivity Platform allowing to jointly assess and develop connectivity projects.

Over 60 years after the foundation of the EU, every challenge that comes up brings the same waves of rumours about European countries splitting. However, reality is stubborn: the EU has made itself into the first trade power in the world; it is the world’s biggest exporter of manufactured goods and services, and the biggest import market for over 100 countries; the EU and its member states are the world’s leading donors of humanitarian aid, helping victims of man-made and natural disasters worldwide; the euro is the second most important global reserve currency; European women have the world’s highest average score in the Personal Freedom Index; citizens in the EU live more than eight years longer than the world’s average … The European project has created the longest period of prosperity and peace in the history of our continent. Data prove the European political, social and economic system is very good for our citizens. With such a record, I do not foresee any European government, regardless of its location within the union, splitting because of China’s investments.

All of this proves that the EU’s approach to [the Belt and Road Initiative] is, in general terms, cooperative. All member states have approved the strategy through their representatives in the council. Thus we cannot talk about EU countries being split by [the Belt and Road Initiative], but rather united, since they have jointly and unanimously agreed on which are the paramount principles of engagement. Of course each member state is a sovereign state and they may nuance their own approach to [the Belt and Road Initiative], but the European strategy provides bedrock guidelines.

To sum up, in Europe there is neither [countries on] alert nor disunion about [the Belt and Road Initiative].

With the EU Parliament elections approaching and the subsequent election of a new EC president, how do you expect the EU will navigate the US-EU-China triangle? Will the EU be forced to pick a lane?

BORRELL: We expect a new commission that will continue the job undertaken by the current one: strengthening EU institutions, promoting cohesion and unity among member states and consolidating the EU’s [Common Foreign and Security Policy] to endow the union with the necessary instruments to act as a world power. Member states and institutions envisage the EU’s international role as a force for good that promotes international peace and security and is open to all international players. It is not about picking a lane, but about ensuring global stability by engaging with all of the agents in the international system in order to achieve agreements and compromises.

What’s the influence of the trade war between the US and China for Europe?

BORRELL: One of the EU’s key values is the concept of open market economy; and one of its main foreign policy goals is to promote an open and rules-based international trading system. Why? Because we believe they go hand in hand with the welfare of citizens. If a true trade war was unleashed (and I say so because I’m not sure that current trade tensions qualify as a trade war yet), this would undermine both open market economy as a value and the realisation of an open and rules-based international trading system. Therefore, global prosperity and the life of citizens (no matter their nationality) would be negatively affected. In fact, as a result of current trade tensions we are already observing deterioration of world economic growth prospects as well as worsening investor confidence and business climate worldwide.

However, crises also hide opportunities. Today we are witnessing negotiations between the main international economic players and there’s a lot of brainstorming going on about how to enforce the international trading system. In the end, this episode may end up with stronger and more up-to-date international trade rules.

Just a few weeks ago, the European Council categorised China as a “systemic rival” in certain areas. What are the areas that China’s rivalry with the EU is the most prominent and why?BORRELL: As far as I know this categorisation came from a joint communication of the commission and the [high representative/vice-president], not from the European Council. The communication is very clear about the areas in which China and the EU may conflict. The EU is built on a series of values that we deem universal, such as respect for human rights, rule of law or democracy. We don’t think these values are universal because they are our values but because they objectively enhance the life of citizens. Actually not all EU countries were necessarily guided by this values system in the past, but the prospect of joining the EU pushed them to embrace them and by doing so the life of their citizens improved. Statistics and surveys confirm this point.

There is nothing new in the fact that China and the EU have different ideas on what is best for their citizens. In the past this wasn’t an obstacle for them to respect each other’s ideas and cooperate fruitfully. The novelty now is China promoting alternative governance models abroad or even at the multilateral level. Here is where the commission identifies a systemic rivalry; the debate is not between EU and China any more, but worldwide. We’re deeply convinced about the idea of a set of values that are universal for the whole of humankind, irrespective of where people are born, and we will keep defending this position in a civilised fashion and by means of reasoning.

I would also like to point out that the same communication identifies many other areas for cooperation between China and the EU; the fight against climate change or the fulfilment of [sustainable development goals] are just some examples. This is not a paper seeking to heighten tensions between China and the EU, but a document that objectively assesses the relation between both giants with all its pros and cons. The EU has always addressed China on the basis that good friends are able to talk frankly about their disagreements and reach compromises at the negotiation table.

What will be the main theme of EU-China relations in the next five years or over a longer period? Engagement or confrontation, which is the best choice for European countries’ interests?

BORRELL: Personally I would expect, and desire, engagement and cooperation. As I said the world is facing formidable global challenges and we can only succeed by joining our efforts in the international community as a whole: the fight against climate change, Africa’s development, regional conflicts that threaten international peace and security in the Middle East or on the Korean peninsula … the list is too long. The welfare of all of us relies on our ability to cooperate.